Vienna: A Vienna court found six ex-directors of Austrian bank BAWAG not guilty of fraud Tuesday, in a case that saw disgraced former bank chief Helmut Elsner sentenced to nearly 10 years in jail. The six ex-directors were found not guilty on various charges of fraud, breach of trust and falsifying accounts, while a seventh was sentenced to one month in prison.

The seven had already been sentenced in a first trial in 2007-2008 to between 18 months and four years in prison. But the case was rolled out again after the supreme court in 2010 found serious procedural flaws in the initial trial, one of the biggest in Austrian history. The bank's former directors were accused of gambling away 1.72 billion euros (2.7 billion dollars) in speculative investments that brought BAWAG to the brink of collapse in 2006.

Judge Christian Boehm argued however on Tuesday that the guilty parties in the scandal were ex-bank chief Elsner and his successor Johann Zwettler, in explaining his decision. Elsner, now 77, was sentenced in July 2008 to nine and a half years in prison, just short of the maximum sentence. This was reduced to seven and a half years in December 2010 before a court decided last year to release him due to ill health.

Zwettler was meanwhile sentenced to five years in the initial trial and was also freed for health reasons. Among the ex-directors who were cleared on Tuesday was Wolfgang Floettl, a US-based banker and son of Elsner's predecessor at the head of BAWAG, who made risky investments in the Caribbean and United States on BAWAG's behalf.

The BAWAG scandal, which extended to a major Austrian trade union and the governing Social Democrats, almost resulted in the bank's bankruptcy in 2006, before it was sold in 2007 to US-based private investment firm Cerberus.